Housing affordability deteriorates
National housing affordability deteriorated 11.4% in the year to August, driven by Auckland and Canterbury, the latest Massey University housing affordability report shows.
Tuesday, October 14th 2014, 12:00AM
by The Landlord
The average annual weekly wage increase of $28.06 over the year was not enough to offset a $30,000 increase in the national median house price and an increase in the average mortgage interest rate from 5.52% to 5.85%, the report said.
Affordability is assessed by comparing the average weekly earnings with the median dwelling price and interest rate.
In some regions, affordability improved over the year. Manawatu/Wanganui's affordability increased 2.7%, Taranaki's was up 1.2% and Northland's 0.2%.
But Auckland's affordability worsened by 14.4% and Canterbury deteriorated 11.7% over the year to August. Southland was close behind with a 9.4% deterioration.
On a quarterly basis, all regions' affordability decreased.
Auckland was the least affordable region, followed by Central Otago/Lakes and Canterbury. Southland remained the most affordable, at 51.4% of the national average. Manawatu/Wanganui was in second place with Taranaki third.
The report said: "Indications are affordability will remain difficult for the remainder of 2014 and into 2015. The average mortgage interest rate is likely to continue to increase as borrowers roll over their mortgages. Also over the last quarter the national average weekly wage actually fell by $5.75 per week and small declines in the average weekly wage were evident in 10 our of 12 regions."
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